Marketing Budget Planning 2023
While running marketing budgets for over 20 years, during that time we have experienced the rise in digital and witnessed channels and platforms come and go. As a young Marketeer, various mentors included successful, well respected business leaders and investors of international corporates. They taught me that a blank piece of paper, a pencil, rubber and calculator was all I needed to construct a market leading budget strategy. Nowadays, sale and marketing leaders have access to; tools, analytical software and data that can help when putting together an effective budget. The fact remains that that sales and marketing budgeting, planning and forecasting still play a key part of any business strategy. No matter when your budget year starts, this article has been written to help you consider items people often overlook. Whether you are an experienced Sales and Marketing Leader and have been budgeting many years or 2023 is your first marketing budget, then the tips discussed below can help,
Don't worry, the guide is not going to dictate 'how' or 'when' you should spend your budget, but some useful items to consider when planning your 2023 marketing budget.
Marketing Budget 2023
Gartner's CMO Survey suggests that the average marketing spend should be 11% of total revenue, while other commentators suggest that the proportion of marketing budget versus revenue should be higher for newer companies or challenger brands. The challenge is that companies are still trying to understand the best areas in which to invest their marketing budgets. Much is written regards digital spend versus more traditional marketing budgeting, but it is sometimes hard to compete without huge marketing budgets. However, many companies have proved that with a clear strategy, start-ups can become market leaders. Here are a few main factors to consider;
Strategy Is Key
Start with the business strategy. What is your company trying to achieve in the way of growth? Work on your marketing budget allocation for the areas that may need the most help. Proficient sales and marketing leaders will base their marketing budgets on their top of the funnel (TOFU), bottom of the funnel (BOFU), marketing qualified leads (MQLs) and sales qualified leads (SQLs). From start-up to large corporate, consider the overall business objectives and work down. Work to find out the sales strategy, product development strategy as examples. Ask the questions, how many new enquiries are required, and where are the audience for those enquiries? Don't think short term, quarterly, yearly but rather think as this year as also investing in future years. Diving straight into the numbers or the pre-defined marketing budget, sales and marketing leaders and business owners forget to step back and consider the main company mission, short, medium, long.
When it comes to organising sales and marketing budgets, Secret Source have found that a healthy exercise is to create your own perfect sales and marketing plan, with the view that there were no restrictions on the amount of budget you are allowed to spend. Playing out this scenario, a marketing team don't hold back and think about all the activities, tools, partnerships they will need to be market leaders. A no holes barred approach makes a marketing team think big! From this, work backward to see how much of this you can achieve by working creatively with the actual budget. This way, your thinking is not shackled by the limitations of simple budget allocation, but rather by what could be achieved. You'll be amazed at what alternatives are open to you when thinking big, then realigning what can be achieved year one, two etc.
Budgets will almost always require return on investment (ROI), therefore a budget needs to be accountable. But do not be afraid to experiment. The most proactive sales leaders and business owners we work with, will keep some flexibility within their 2023 marketing budget process, so they can capitalise on opportunities that were not necessarily planned earlier on in the year (or previous budget year). If you are going to experiment and try something new, then commit to an idea, don’t dabble! Simply trying marketing initiatives but then cancel them without giving them a chance, because they do not create immediate results, is not always conducive and can be short-sighted. First understand why, m then adjust the approach, give it time rather than dismissing it straight away. Also, the phrase, "We’ve already tried that!" attitude is commonplace. Just because you tried it once doesn’t mean it won’t work. Instead, look to other companies in other sectors that have tried something similar and succeeded. If you want to differentiate from your competition, then your 2023 marketing budget does not need to be a carbon copy of your 2022 Marketing Budget.
Invest In Your Infrastructure Budget
A solid base on which to launch your campaigns, measure the results and reduce time spent working and reworking content or campaigns is money well spent. Examine your CRM. Are you using automation systems to help with sales, marketing or service operations? A good CRM, sales and marketing tech will help with consistency in approach, a solid customer journey, and negating the need for non-strategic manual work. Examine your budget, how much goes towards your core infrastructure; websites, applications, CRM, automation, reporting as examples? If you need to carry out a full sales and marketing tech audit or need advice on getting the most out of yours, then this is another way Secret Source help clients.
Consider growth within your team. As well as all the onboarding costs such as inductions, computer, technology, benefits, and other onboarding-related needs, account training and development for your team in 2023 and beyond. Also, look to leverage agencies that can also provide resource as well as traditional agency services, to help get the job done. Marketing-on-Demand or Marketing-in-a-Box are good alternatives that can save time and money. They will help you stay agile and give flexibility in your budget.
Allocation Of Marketing Budget
Business leaders often allocate marketing budgets in marketing functional silos e.g. online, offline, outbound, inbound, customers, new business etc. Segregating your budget can be quite restrictive. Forward-thinking companies still act like start-ups, joining up budgeted activity to deliver campaigns across platforms and remaining agile. Sales & Marketing leaders sometimes like to plan by campaigns, this gives them focus and targeted return on investment assigned to campaigns throughout the year. Depending on your own market landscape, examples can include; Black Friday, national holidays or key industry events. Organising your budget into campaigns involves assigning the correct skills and tracking resources and results accordingly. There are helpful sales and marketing automation tools that can help you run campaigns and relate activities to budget, so results can be attributed accordingly.
Factor In People Budgets
Budget spend on people versus operating budget. Be careful not to invest large amounts of budget on people expecting them to deliver straight away. New members of your team will take time to onboard and will not start to offer return on investment straight away. While they will be separate, good sales and marketing leaders will consider their salary budget and marketing spend as one total cost to the business. Leaders will be looking for ROI not just on their budget spend, but their overall cost to the business. Cutting back on marketing budget spend and choosing to ignore your overall cost to the business can be detrimental, so consider the alternatives of spending your overall budget allocation wisely. Marketing-in-a-box provides suitable ways of using your marketing budgets wisely.
Do not forget to allocate budget on research or testing of messages. Testing will often get ignored or downgraded, but it is still important to research and test. Testing can however incur cost, so make sure it is accounted for in your sales and marketing budget. e.g. A/B split testing of messaging, new events or advertising opportunities. Testing in your 2023 budget year is important to allow you to realise opportunities that your competition have not woken up to yet.
Here is a useful checklist to use when considering your sales and marketing budgets:
- Start with the strategy
- Don’t be afraid to try something new
- Invest in your sales and marketing infrastructure
- When budgeting, invest some time in reviewing the past results
- Invest in the competition research
- Review how the market buys and if you can be disruptive!
- Look at your total costs, salary and budget
- Try to think joined up with your budget and not in silos
- Include capacity to test and research.
Here are some FREE marketing budget templates, to download. If you prefer to have a discussion regarding getting the most from your 2023 budge, then why not get in contact with Secret Source Marketing?
About Secret Source Marketing – With 20+ years experience working in Sales & Marketing, our specialists help business owners, sales and marketing leaders to get the best out of their marketing operations. Website design and build, SEO, Paid, Graphic Design, Campaigns, Digital Marketing, Market Research and Content Writing, we are the Secret Source behind company brands.